Mokaila, Tshekedi’s Big money swap

Publishing Date : 17 October, 2016

Author : AUBREY LUTE

Following his arrival at the Ministry of Transport and Communications, Minister Kitso Mokaila could find himself handing over Air Botswana to Tshekedi Khama’s Ministry of Environment, Wildlife and Tourism, if what was recently relayed at the parastatal’s board persists.

Mokaila was shuffled from the former Ministry of Energy and Water Resources. The reason advanced for moving Air Botswana to Tshekedi’s ministry is that most of the Air Botswana customers, roughly about 70 percent of them are tourists. This publication has been informed that the Air Botswana board chaired by former Botswana Defence Force (BDF) Commander, retired Major General Tebogo Masire was recently briefed on the possible developments following the re-organisation of Ministries.

The decision is also accompanied by a development that will see a P2.6 billion tender to acquire four jets and turboprops being cancelled and re-started at the new parent Ministry.The tender process was almost at the final stages of due process. Three companies, Bombadier of Canada; ATR of France; and Embraer of Brazil had entered the race to scoop the lucrative deal. The Acting General Manager of Air Botswana, Agnes Khunwane had mentioned in passing at the Samson Guma Moyo chaired Parliamentary Committee on Statutory Bodies that they intend to acquire new Aircrafts in the near future.

Over a pro-longed period of time, Air Botswana has been using ATRs. The Air Botswana engineers and pilots are trained and upskilled in ATRs. The stock and tools are customised to ATRs. Weekend Post gathers that even this time around, ATR had put a convincing bid and was on the verge of outdoing Bombardier and Embraer. In fact this is the tender that forced former Minister of Transport and Communications, Tshenolo Mabeo into the controversial trips to Brazil, Canada and France to do some form of window shopping for aircrafts. The trip has since invited the wrath of the Parliamentary Committee because Mabeo and his then permanent secretary were found to be not fit to decide on the mode of aircraft to be procured by Air Botswana.

ATR’s PROPOSAL WAS APPEALING

In its proposal, ATR of France was to also buy back Air Botswana aging fleet at market price. Indications from Air Botswana sources are that the whole fleet has reached end of useful life.The Board is said to have been impressed with this offer. In addition ATR had pledged to further train Air Botswana engineers and pilots for free on the new Aircrafts in the event that they get the job. The Board had also considered the fact that its staff and the tools for maintenance were compliant with ATRs models. ATR was most likely to get the job to supply the three turboprops.

BOMBADIER WANTS “ALL OR NOTHING”

For its part, Bombardier, which sliced in half the 2016 delivery forecast for its C Series aircraft this week, and said it expected full-year revenue to be at the lower end of its previously announced range, had made it clear that it wanted to do the job as a whole, “all or nothing”. They wanted to supply both the jets and the turboprops. The Board had considered Bombardier for the jets, but following their “all or nothing” demand, they were dropped on the basis that their proposal was inferior to that of ATR when it comes to turboprops. Bombardier, which has agents in Botswana, has in the past supplied the Presidential jet to Botswana. The Department of Wildlife and National Parks operate the KODIAK, also from Bombardier for various logistical missions and departmental duties as well as for anti-poaching and law enforcement.

The setback is the latest for the CSeries program, which took years to get off the ground and has been hit by production delays and cost overruns, causing the Montreal-based plane and train maker to agree to a C$1 billion ($774 million) investment from the Quebec government. The company remains in talks with the Canadian government about further funding.

Bombardier Inc. cautioned that private-aircraft prices will remain under pressure as it posted a wider-than-expected loss, adding to Chief Executive Officer Alain Bellemare’s burdens as he tries to turn around Canada’s largest aerospace company. Reports from Canada indicate that shrinking demand for corporate planes--typically Bombardier’s most profitable business--is weighing on Bellemare as he works to increase profit and cash flow.

The planemaker cut production of its Global 5000 and 6000 business jets last year, and delayed entry into service of another model by two years as sales of large private planes dropped.

EMBRAER WAS CONSIDERED FOR JETS

The Brazilian company is currently doing well in the market and was most likely to be considered for the supply of jets, which is dominantly their stock in trade.

World demand for jet aircraft in the segment of 70-130 seats from 2016 to 2035 will total 6,400 units, according to the forecasts of Brazilian aeronautical company Embraer disclosed at the Farnborough Air Festival in the United Kingdom.

Embraer projects demand for aircraft with between 70 and 90 seats to total 2,300 units while for aircraft with 90 to 130 seats demand is expected to reach 4,100 units, with the overall demand in the period valued at around US$300 billion.

The Brazilian company also said that the world’s fleet of jet aircraft in the segment of 70-130 seats will increase from 2,670 in operation in 2015 to 6,690 in 2035, with the fastest growth of all commercial aviation segments.

AIR BOTSWANA AG GM WITHDRAWS FROM SHORTLIST

As the search for a permanent General Manager at Air Botswana continues, the Board could find itself in a position where they present just one name for consideration to Cabinet. This publication has learnt that Agnes Khunwane withdrew her name from the shortlist of candidates earmarked for the position.

It is understood that she is not happy because she was initially the only candidate left in the shortlist after another set of five fell off on technicalities and lack of business background, but the Board chairman, Masire was unsettled by the prospect of submitting just one name to cabinet for consideration.

The chairman then embarked on a head hunting exercise which led him to former MVA Chief Executive Officer, Cross Kgosidiile. When Khunwane heard of this development she wrote a letter withdrawing her name, pushing the Board back to square one. It is not clear if she will be coerced to rescind her withdrawal or Kgosidiile, a former Air Botswana Finance Manager will be unchallenged before cabinet. The twist into the whole matter is that Kgosidiile left MVA without an explanation for his departure.